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Business News of Sunday, 8 January 2023


Naira redesign: CBN to evaluate exercise as Nigerians cling to old notes

CBN Governor, Godwin Emefiele CBN Governor, Godwin Emefiele

AS the countdown to the January 31, 2023 expiry date for the current designs of N200, N500 and N1000 gathers pace, top management staff of the Central Bank of Nigeria (CBN) have scheduled a series of meetings for later this week to evaluate the transition so far.

The meetings are coming against the backdrop of mounting complaints from the public that the new naira designs are not circulating well enough.

Although commercial banks have been operating on Saturdays as part of their own efforts to enable the public turn in their old currencies in exchange for the new ones, reports from across the country showed that the old notes are still very much in use and the new ones scarce.

The Nation learnt that top officials in the Banking Supervision and Currency Operations departments of the CBN would be meeting later this week to evaluate the reasons why much of the money expected to have been harvested from the Naira redesign decision is yet to come in.

The apex bank has consistently rejected advice from stakeholders to extend the deadline for the old naira notes exchange.

In fact, it has launched a digital countdown metre on its website to indicate the number of days left for the old notes to remain as legal tenders.

The Chief Executive Officer of the Nigerian Financial Intelligence Unit (NFIU), Modibbo Hamman Tukur, said last week that it appeared some Nigerians were not in a hurry to return the affected old notes.

“People are seeing that there is stolen money out there but the record is showing that people are not even rushing to bring it back to take the new notes,” he said.

Tukur expressed concern at the situation and warned that “if it is not controlled you know what will happen because this is a developing economy. It’s not all the sectors that are fully developed.”

He said the large volume of cash outside the banking system was giving rise to excess liquidity crisis.

His words: “Excess liquidity has to do with disbursement of loan from both the government and the private sector, and when the money disbursed in form of credit facilities is not coming back into the system as at the time they are due”.

This development, he said, is the reason the CBN governor Godwin Emefiele was “complaining”.

Tukur said: “Nobody needs to tell you that. You can see the crash of the naira. People demand for dollars because they have the naira and then with the COVID and the war, production of goods is also down so a lot of cash is stuck outside.”

A CBN source told The Nation that “it does not look like the management of the CBN is ready to shift grounds” on the January 31 deadline.

The official could not say how much of the old notes had been deposited.

But the CBN said in late November that it had received a total of N165 billion of the old notes in circulation. This is about six per cent of the total amount projected to be deposited by holders of the old notes.

Aishah Ahmad, Deputy Governor Financial Systems Stability (FSS) of the CBN, while appearing before the National Assembly said only 500 million pieces of the new Naira notes were ordered and printed soon.

Another staff of the CBN said there hasn’t been any arrest of individuals on cases of infraction formally reported to the CBN.

According to him, “Nigerians are urged to come in with their cash to their bank branches and deposit their cash notwithstanding the amount involved.”

Many individuals ranging from politicians and military officers to fraudsters and traders, who have been keeping cash for transactions, are scared of going to the banks to deposit their cash for fear that the amount they deposit might prompt the security agencies to start asking questions.